Malaysia and Indonesia threaten boycott of EU products, say millions of farmers risk losing livelihoods due to palm oil curbs

The Southeast Asian nations have warned of retaliatory measures and economic consequences over the European Union’s plan to curb the use of palm oil in its biofuels by 2030

The palm oil industry watchdog says the proposed curbs seem to be politically motivated and are a protectionist rather than an environmental issue

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A plantation worker holds palm oil fruits. Photo: Reuters

Published: 8:00am, 22 Mar 2019Updated: 1:49pm, 22 Mar 2019

Malaysia and Indonesia, which account for a combined 85 per cent of the global palm oil supply, have warned that millions of farmers risk losing their livelihoods if the European Union stops using the commodity in its biofuels.

The EU’s proposed move comes following a push by the European Parliament to phase out the use of palm oil starting in 2023, ramping up to a ban in 2030, on concerns palm oil production causes deforestation and aggravates climate change.

Both countries have threatened to take retaliatory trade measures, including boycotting EU products, if the ban is implemented.

“We are serious about boycotting EU products,” Indonesian Coordinating Minister for Maritime Affairs Luhut Pandjaitan told the South China Morning Post.

Additionally, Malaysia and Indonesia plan to take the issue to the World Trade Organisation (WTO).

“Malaysia will continue to raise the issue at the various WTO meetings to put pressure on the EU,” said Dr Ong Kian Ming, Malaysia’s Deputy Minister for International Trade and Industry, via email.

Ong said his ministry was also looking at other actions that could be taken to address the issue, but he did not provide details.